The Indian stock market is likely to remain under pressure on Thursday amid weak global cues, and after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.50% in its latest policy meeting. Elevated US Treasury yields and geopolitical uncertainty could also weigh on investor sentiment.
In the previous session, the benchmark equity indices fell over half a percent each, with the Nifty 50 closing near 22,600 level.
Jay Thakkar, Vice President and Head of Derivatives and Quant Research at ICICI Securities, said options data indicates immediate support for the Nifty 50 at 22,500, followed by 22,000 on a cumulative basis. On the upside, 22,800 has the highest call base, followed by 23,000.
“Until 22,200 levels are held, a retracement of the overall eight-week negative close looks more likely,” Thakkar said. He added that the short-term bias remains cautiously bullish, with targets of 22,800-23,000 and 23,200.
Stocks To Buy Today
Jay Thakkar has recommended three stocks to buy — HDFC Life Insurance Company, Petronet LNG and Bharat Heavy Electricals (BHEL) — in the futures segment.
HDFC Life Insurance Company | Buy | Target: Rs 580-590 | Stop Loss: Below Rs 525
HDFC Life has declined sharply from around Rs 820 to Rs 510, accompanied by a rise in open interest, indicating short build-up. Recent selling following IRDAI's amendments related to commission caps added to the pressure.
However, the stock has held its 52-week low and witnessed some short covering in recent sessions, suggesting that near-term selling pressure may be easing. The stock is trading above its max pain level of Rs 530, while call unwinding at the Rs 540 strike also indicates potential short covering.
Futures Strategy: Buy in the Rs 540-550 range; stop loss below Rs 525; target Rs 580-590.
Petronet LNG | Buy | Target: Rs 305-315 | Stop Loss: Below Rs 288
Petronet LNG has corrected from its highs and undergone a prolonged consolidation. The recent decline in futures open interest indicated long unwinding, while the stock's relative outperformance and subsequent rise in open interest point towards fresh long build-up.
Options data shows strong put support at the Rs 280 strike, while call unwinding across Rs 285-310 is positive for the stock. Petronet LNG is also trading above its Rs 290 max pain level, which could act as near-term support.
Futures Strategy: Buy in the Rs 294-298 range; stop loss below Rs 288; target Rs 305-315.
BHEL | Buy | Target: Rs 470-480 | Stop Loss: Below Rs 430
BHEL share price has outperformed the broader market and recently broken out of a sideways consolidation, indicating potential continuation of the uptrend. Open interest had declined during the consolidation, suggesting profit booking, but has started rising following the breakout, indicating scope for fresh long positions.
Options data shows strong put support spread across the Rs 400-450 strikes, while the highest call base is at Rs 450. A sustained move above this level could trigger further upside. The stock is also trading well above its Rs 435 max pain level, which may now act as near-term support.
Futures Strategy: Buy in the Rs 445-450 range; stop loss below Rs 430; target Rs 470-480.
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